THE TAKEAWAY: German retail sales rise 1.2% in November, better than expected -> Sales are down annually -> Euro declines despite better than expected sales
German retail sales rose a surprising 1.2% in November (real and seasonally adjusted), the biggest rise in eight months, according to the Federal Statistical Office. The monthly rise in retail sales was better than the expected 0.8% rise and was a turnaround from October’s revised 1.3% decline in retail sales. Retail sales were 0.9% (real) lower than November 2011.
The German economy is suffering from the impact of the surrounding debt crisis, and Euro investors are looking for signs of recovery in the Euro-zone’s biggest economy. The Bundesbank cut its growth forecast for 2013 to 0.4% last month, and just yesterday, unemployment was reported to have risen for the ninth straight month in Germany. Therefore, the higher retail sales could be seen as a relief from some recent negative news.
However, the Euro did not significantly react to the better than expected retail sales; instead the Euro fell closer to 1.3000 against the US Dollar in forex trading. Support could be provided by the key 1.3000 figure, and resistance could be provided by the previous resistance line at 1.3158.
EURUSD Daily: January 4, 2013